• Net Income: $14.3 million or $0.75 per diluted share.
• Operating Net Income: $11.1 million or $0.58 per diluted share.
• Gross Written Premiums: $74.9 million, up from $70.8 million in Q3 2023.
• Expense Ratio: 31.7%, compared to 33.6% in the prior year.
• Favorable Prior Year Development: $8.5 million or 12.6% loss ratio points.
• Net Investment Income: Decreased 7.6% to $7.5 million.
• Book Value Per Share: $16.50.
• Operating Return on Average Equity: 14.2%.
• Statutory Surplus: $294.1 million at quarter end.
• Shares Repurchased: 22,000 shares at an average price of $46.79.

• Warning! GuruFocus has detected 4 Warning Sign with AMSF.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• AMERISAFE Inc (NASDAQ:AMSF) reported a significant increase in premium growth, with an 8.8% rise over the previous year's third quarter.
• The company declared a special dividend of $3 per share, reflecting its commitment to shareholder returns.
• AMERISAFE Inc (NASDAQ:AMSF) maintained a strong renewal retention rate of 93.6%, contributing to higher in-force policy count and gross written premium growth of 5.8%.
• The company experienced favorable development on prior accident years, with $80.5 million stemming from favorable case development.
• AMERISAFE Inc (NASDAQ:AMSF) reported a decrease in total underwriting and other expenses, resulting in an improved expense ratio of 31.7% compared to 33.6% in the prior year.

Negative Points

• The contribution of audit premiums to overall premiums is moderating compared to the same period last year.
• Net investment income decreased by 7.6% due to a reduced portfolio size, despite increased reinvestment rates.
• The company faces ongoing competitive pressures in the workers' compensation market, driven by declining rates.
• Medical inflation and the viability of current fee schedules pose potential threats to loss trends in the industry.
• Despite efforts to engage agents and improve underwriting efficiency, the competitive market environment remains challenging.

Q & A Highlights

Q: Can you provide an update on the progress of your agency-level efforts and what stage you are in? A: Gerry Frost, President and CEO, explained that AMERISAFE has been focusing on agent engagement and internal efficiencies to better respond to the workers' comp environment. The company is seeing success from these employee-led initiatives, which are reflected in their top-line growth. They are maintaining underwriting discipline while improving efficiency and effectiveness without changing their appetite.

Q: How do recent hurricanes affect your business, considering your exposure in states like Florida and Georgia? A: Gerry Frost noted that while they empathize with those affected, the reconstruction efforts could potentially benefit AMERISAFE due to their significant presence in construction and trucking in the southeastern U.S., which are crucial for recovery efforts.

Q: What is driving the recent uptick in top-line growth, and is it related to changes in the broader market environment? A: Gerry Frost stated that the competitive environment remains intense, but AMERISAFE is positioning itself differently by reinforcing its appetite and working more effectively with agents. The focus on policy count growth and new business has been a strategic priority, contributing to the recent top-line improvements.

Q: Are there any changes in the market regarding package versus monoline workers' comp policies? A: Gerry Frost mentioned that there hasn't been a significant shift in the market regarding package carriers pulling away from workers' comp. AMERISAFE continues to emphasize its value proposition, including safety and claims services, to remain competitive.

Q: What are the potential impacts of medical inflation and fee schedule changes on your business? A: Gerry Frost highlighted that while there is a risk of medical inflation affecting fee schedules, they have not observed significant changes yet. The company is monitoring developments, such as recent changes in Florida, which are expected to be reflected in future rate adjustments.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.